Thanks very much for playing!
One thing I didn't balance well due to the game's nature and the way I knocked it out in a couple of days using the VX ACE sample maps and whatnot is that although you can do the dungeons in any order, if you do them out of sequence you are going to have a tough time. For the record, the easiest (correct) order would be Pyramid, Ice Temple, then the big tree. And YES you need to be actually level 1 to get the milk from the town store and have put all quest items back.
Progression wise, I only recommend fighting the enemies that block your path or in treasure chests as you can level down VERY easily in a small, safe secluded area after the main quests are done.
If you go to the ruins in the SW corner of the overworld, you can fight VERY weak slimes to level you down quickly and there is a bonus slime lurking in the corner that knocks ~5-10 levels off per kill. You can easily get to level 1 from level 30ish in a matter of minutes (do after you put the quest items back or you will be too weak).
Also I think the effort to get the milk is well worth it. There is a bonus scene with Eric handing the milk to his mom and also a battle sprite/animation I custom made for the ending. Glad you like it and good luck with the jam!